How does the Equity Release Council promote consumer awareness?

Making sure you know your rights and protections

The Equity Release Council is working hard to promote consumer awareness about equity release. They have also created important product standards to protect you if you take out an equity release plan.

In this article, we explore the work of the Equity Release Council, how it promotes consumer awareness and the protections you’ll receive as a result of their standards. We’ll discuss:

• How does an equity release plan work?
• Who is the Equity Release Council?
• What are the Equity Release Council’s standards?
• How does the Equity Release Council promote consumer awareness?

How does an equity release plan work?

Equity release enables homeowners aged 55 and over to unlock a tax-free cash lump sum from the value of your home. 

You can spend the money however you want to, once you first clear any outstanding mortgage on your home. There are typically no monthly repayments to make on a lifetime mortgage, the most popular type of equity release, unless you want to reduce the amount of interest that would otherwise roll-up.

When you pass away or move into long-term care, the money from the sale of your home will repay your loan plus interest.

Who is the Equity Release Council?

Established in 1991, the Equity Release Council (ERC) is the industry’s representative body which represents providers, financial advisers, solicitors and other industry professionals. 

The ERC seeks to lead a ‘consumer-focused market’ by setting strict standards and protections that enable customers to trust that equity release is reliable and safe. To ensure these standards are met, all members must agree to abide by its rules, and its Principles and Outcomes.

To promote equity release consumer awareness, the Equity Release Council regularly produces evidence-led market-insights, reports and data for publication. The tireless work of the Equity Release Council has helped to educate consumers how far the industry has come since the 90s, when equity release horror stories hit the front pages.

How does the Equity Release Council promote consumer awareness?

The Equity Release Council provides multiple channels for the public to access helpful information about the industry. They also work hard to ensure equity release consumer awareness and safeguarding is at the forefront of the minds of all stakeholders across the sector.

Website: The simplest way to access the latest and most relevant equity release news is visiting the Equity Release Knowledge Hub. It is full of news reports, blogs and videos which provide updates across the whole sector.

Press releases: The Equity Release Council issues press releases to communicate industry updates and help educate those unfamiliar with equity release products. It has a very positive relationship with the UK press, which regularly quotes board members in articles about the industry.

Reports: The Equity Release Council regularly commission reports such as their Later Life Lending: Great Expectations report in March 2023. The aim of the Equity Release Council is to help set out a route map for the government, regulators and industry as a whole to better support later life consumers.

Lobbying: The Equity Release Council is regarded across Westminster and Whitehall as a trusted expert in their field and a significant resource to draw upon. By attending government conferences and holding meetings with ministers and advisers, they can lobby to effect policy change and promote consumer awareness.

What are the Equity Release Council’s standards?

To ensure equity release products are safe and reliable for consumers, the Equity Release Council has a strict set of rules called ‘Standards’ that all members must sign up to.

These Standards reassure consumers and promote awareness of the measures now in place to protect their rights:

• For lifetime mortgages, interest rates must be fixed or, if they are variable, there must be a “cap” (upper limit) which is fixed for the life of the loan.
• The right to remain in your property for life or until you need to move into long-term care.
• The right to move to another property subject to the new property being acceptable to your product provider. 
• The product must have a “no negative equity guarantee” so you will never owe more than the value of your home.
• The right to make penalty free payments, subject to lending criteria.

In addition, members must agree to the Equity Release Council’s ‘Required Customer Outcomes’. These ensure the advice, information and professional services they provide are clear and impartial:

• Products and services offered should suit the customer needs best and be fairly priced.
• Members should seek to identify and provide appropriate support to vulnerable customers.
• Customers should be confident they can live in their own home for as long as they wish, or move to a suitable alternative property, subject to the lender’s criteria.
• Members should ensure customers understand their rights and responsibilities at every point of contact.

These requirements help to ensure consumers are fully informed at every stage of the equity release journey. In this way, homeowners have complete confidence in the product they are exploring and in their decision whether to proceed or not.

Speak to a an equity release adviser today

Our selected equity release specialists are ready and waiting to help you explore your options and find the best plan for your needs. They are members of the Equity Release Council, giving you reassurance about the service you can expect from them.

To arrange an appointment with an adviser, talk to our friendly consultants on 0808 178 3055 or request a call back at a time that suits you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.